Estate agents are being urged to reassess their fee structure and not be afraid to reflect the time and level of work they are undertaking to see a transaction through.
A report by property data companies tmgroup, mio and Conveyancing Data Services sought the views of 800 professionals across agency, legal and lending work on the “New Normal” post-Covid market.
It highlighted that estate agents were more likely to report receiving low fees and higher costs compared with other sectors.
The research found that around 17% of agents have reported reduced fees over the past 12 months and 16% have faced higher costs.
The report said this was a result of the low levels of stock and slow sales process, which meant agents have been spending longer on transactions, while some may have cut fees to gain market share during the stamp duty holiday.
Conveyancers appear to be working longer hours though, with more than 35% spending more time in the office compared with just under 20% among agents.
More conveyancers than agents reported increased fees, at 17% compared with 12%.
Respondents were also asked about the main cause of delays, with 34% blaming conveyancers, 21% agents and the rest made up of Land Registry, surveyors, staff shortages and buyers not being ready.
Phil Natusch, managing director of sales progression software provider mio, said agents responding to the report were also concerned about changing interest rates and consumer confidence – particularly as many are going into 2022 with very little property for sale.
He said: “Agents expressed concern about the wider political landscape and economic policies, suggesting that the possible changes on the horizon – including regulation of estate agency and removal of referral fees – could be playing heavily on their minds across 2022.
“Alongside this, property professionals across the board are tuning into the potential impact of longer-term pandemic uncertainty.
“This may impact the typical seasonality trends and stock levels.
“Whether there will be the usual flurry of activity in the spring will remain to be seen.
“Whatever happens, estate agents will need to take a measured approach and do what they can to avoid another knee-jerk reduction in fees.
“Beyond this, the ‘new normal’ seems rife with recruitment and staff retention challenges – and it will be interesting to see how branches rise to the challenge of attracting the best talent through their doors.”
Joe Pepper, chief executive at tmgroup, added: “The property market faced an unprecedentedly busy period with clear winners and losers.
“Businesses that invested in their staff, technology and even raised their fees fared rather well overall.
“Whereas the picture is comparatively bleak for those who lost sight of the bottom line and struggled to retain their staff.
“Hopefully lessons have been learnt all round.”
Read the full report.